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Here's Why Investors Should Buy Avis Budget (CAR) Stock Now

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Avis Budget Group, Inc. (CAR - Free Report) has performed well in the past year and shows potential to sustain the momentum. If you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.

Let’s look at the factors that make the stock an attractive pick.

An Outperformer: Shares of Avis Budget have surged 66.7% in the past year against the 46.6% decline of the industry it belongs to.

Zacks Investment Research
Image Source: Zacks Investment Research

Solid Rank & Favorable VGM Score: Avis Budget currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank of 1 or 2, offer the best investment opportunities. Thus, CAR seems an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: Four estimates for 2022 have moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2022 earnings has moved up 19.9% in the past 60 days.

Positive Earnings Surprise History: Avis Budget has an impressive earnings surprise history. The Bottom line outpaced the Zacks Consensus Estimate in all the trailing four quarters, the earnings surprise being 69.5%, on average.

Strong Prospects: The Zacks Consensus Estimate for 2022 earnings is pegged at $47.02, indicating growth of 109.1% from the year-ago reported figure.  

Key Driving Factors: Avis Budget has an impressive track record of rewarding its shareholders through share repurchases. In 2021, 2020 and 2019, CAR bought back shares worth $1.46 billion, $119 million and $67 million, respectively. Such moves underline its assurance in business and help instill investors’ confidence in the stock by positively impacting the earnings per share.

CAR is focused on expanding its connected vehicles fleet. Avis Budget's connected car program enables customers to manage their entire rental through the Avis mobile app. Expansion of connected cars fleet allows streamlining of operations and cost reduction. It enables enhanced tracking of idle vehicles and automated processing of cars ready to rent.

Other Stocks to Consider

Investors interested in the broader Zacks Business Services sector can also consider stocks like Gartner, Inc. (IT - Free Report) , Automatic Data Processing, Inc. (ADP - Free Report) and CRA International, Inc. (CRAI - Free Report) .

Gartner sports a Zacks Rank #1 at present. IT has an earnings growth rate of 3.4% for 2023.

Gartner delivered a trailing four-quarter earnings surprise of 25.3%, on average.

ADP carries a Zacks Rank #2 (Buy) at present. ADP has a long-term earnings growth expectation of 12%.

ADP delivered a trailing four-quarter earnings surprise of 5%, on average.

CRA International carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.
 

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